February 7, 2022
Business is often described as a rollercoaster of emotions with very high highs and very low lows. It hardly ever is smooth sailing for long – challenges will inevitably come and you’ll have to face them. After helping run Ladder through ups and downs, I’ve realized how important it is for everyone in our team (founders, executives, employees, etc.) to keep emotions out of the business.
That’s not as easy as it sounds. Emotions are part of human nature, so by trying to make more rational decisions we’re literally fighting against who we are engineered to be. In this article, I want to share with you a few tips that have helped me make progress on this challenge – but let me tell you a quick, true story first:
Come back with me to early 2019, which was one of the toughest moments in Ladder’s history. We’re about $500,000+ in debt and bleeding money every month. Why? We’re trying to turn Ladder into a SaaS product, and we’re investing a lot of money to make it a tech business.
I’m looking at the spreadsheets during Jon’s, our CEO, wedding, and the numbers are clear: if we don’t change, we’re going bankrupt. We loved the tech side, but the data told us that the services side is where we excelled.
This led to some painful decisions – mostly, we had to let go of people we really cared for. We, of course, tried to help them find new positions, gave recommendations, posted on LinkedIn, gave a list with the available people to other companies. But at the end of the day, this was a low moment for us to put people through that. Our emotions didn’t want to do it, but we had to make sacrifices so the business could survive.
I don’t share the story with you lightly. We’ve made a lot of changes and added controls to our company so we’re never in this position again because it really was a low point. I share it to show rationality and clear decision-making is needed if you want your company to be sustainable over the long-term, and ideally, so you’re never put in the spot we were in the first place.
But if we’re fighting human nature when we don’t follow our emotions, can we get better at it? I truly think so. Myself and Ladder’s executive team are proof that you can figure out how to take your emotions out of business and not make them part of the equation. Here’s what has helped us:
As CFO, I can look at a forecast and see that we will have X amount of money coming in over the next few months and feel ecstatic. But what happens if, suddenly and for reasons out of our control, that number starts dropping? I will feel now as low as high I was feeling when things were going well.
There will be difficult moments while running a company – you and I know that. It’d be naive to think it’ll always be smooth sailing. So, expect those not-so-great moments, be prepared to handle them, and think of them as a sign that you’re running face-first towards a challenge.
At the same time, I believe resiliency also comes from not getting too pumped up when things are going great. If you don’t get too high when the forecast looks very green, you won’t get too low when it starts looking a bit redder. That said, you still want to celebrate big milestones and appreciate hitting your objectives.
Most people make decisions based on their gut, but I truly believe that it’s a very risky approach. Our gut told us to invest a million plus on the tech side of our company, but the truth is that what we were great at was the creative and the servicing side of things.
You know who told us what to focus on? Data. The spreadsheets that I was looking over at that wedding showed us where we had to invest and what we had to cut. Without data, you don’t have a story.
Data also told us how to solve the problem we were in: which departments were making a profit, who was impacting our bottom line positively, what we had to sacrifice to cut debt and reach profitability, etc. Numbers allow you to keep your emotions in check and make the best decisions for your company.
This seems obvious, but I often see people struggle with being solution-oriented when dealing with a challenge. Think of that story I shared with you: we’re at our CEO’s wedding and seeing how we will need to go against our emotions or we’ll go bankrupt. We had two options:
Option 1 is to think, “what a mistake we’ve made investing in building our tech. We suck. Why would we do that? Why…” Option 2 was to say, “ok, we need to make a change. How can we salvage this situation in the best way possible?”
Option 1 is what your emotions want you to do. Option 2 is what your company needs you to do – focus on finding a solution, execute it, and solve the problem. Of course, you also want to analyze why you were in that hard spot to begin with, so it doesn’t happen again – but the first course of action is to solve it as soon as possible.
Being resilient, solution-oriented, and using data to make decisions is not something that only applies to you as an individual. Your whole team should have that mindset and it should be ingrained in your company’s culture for it to scale.
If you’re alone in this journey, you have bigger volatility than if your whole team shares the same concerns, issues, and challenges. They will be there to support you and keep your decision-making accountable while you do the same for them. No one expects you or anyone to always make perfect choices, but hopefully, this article gave you some insights on how to keep your emotions out of the business.
As a final note, I do want to add that when I say “keep emotions out of the business”, I don’t mean that you shouldn’t have empathy, compassion, and very much care for your people. Those are very important values, and they help build a great team and foster a positive company culture – these are your greatest assets. It’s not at all about being a robot. It’s about not letting irrational emotions get the best out of your decision-making process. I hope that difference is clear.
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